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From the card of the design organisation in the Internet to B2B
For understanding of those possibilities which give to the companies of technology of automation of interfirm interaction through the Internet (Business-to-Business or В2В), it is necessary to consider is short at least main principles of construction of such systems and their integration with suppliers and customers. The primary goal of systems B2B – increase of efficiency of interaction of the companies in the market.

Systems B2B can be subdivided into two classes conditionally.

Let's consider the first class which is made by corporate information systems B2B.

Corporate information systems (CIS) are a kernel for creation of systems B2B as they, automating and optimising interaction processes between divisions in the enterprise, allow to organise effectively interaction with suppliers and clients.

The structure of CIS usually includes following modules:
- management of the finance;
- production management;
- management of warehouse stocks;
- personnel administration;
- management of mutual relations with suppliers;
- management of interaction with clients.

But CIS yet is not high-grade trading system B2B though its some modules can carry out a number of functions on trading-purchasing activity of the enterprise.

Let's consider the second class which is made by electronic trading platforms.

Electronic trading platforms are intended for the organisation of commercial activity of the enterprises-participants. Trading platforms В2В by creation principles can be divided into three basic groups:
- Independent
- Branch
- Private
Besides, in each group they can differ on functionality. And, various combinations of functions on one platform are possible. Each decision has the advantages and lacks. Any trading platform is not capable to provide effectively all functions necessary for participants of the market. In result, the companies leaving on market B2B usually use a set of various channels of interaction with the clients, suppliers and partners.

Let's consider differences between В2В and В2С.

Term В2В usually is understood as wide sphere of on-line services in which, anyhow, participate not only, and it is not so much, private persons, and the enterprises and the companies. That is in sector В2В the goods and the services address, which companies sell each other. The basic commodity and monetary turn occur in the corporate environment and practically do not enter the consumer market. Special appeal of this sector of on-line commerce consists in that, it is more adhered to commercial necessity, instead of to consumer predilections and a fashion.

But before to consider features of each of models of construction of on-line systems B2B, we will consider, what advantages of these trading platforms before on-line systems of retail trade B2C (Business-to-Consumer).

Let's consider problems B2B of systems.

The primary goal of systems B2B – increase of an overall performance of the companies on В2В-market for the account of decrease in expenses for preparation of trading procedures and expansion of geography of business to scale of all world.

Into problems B2B of systems also enters:
- the interaction organisation between the enterprises – quickly and conveniently
- construction of the protected reliable channels of information interchange between firms
- coordination of actions of the enterprises and their joint development on the basis of an information exchange

Interaction can be connected with trade, an exchange of technologies, experience, investment activity etc.

Let's consider classification of B2B-systems.

B2B-systems in the environment the Internet differ on a set of offered functions:
1. A corporate site of the company: it is intended for dialogue with partners and counterparts, contains the information on the company, the personnel, a management, production, the description of services.
2. The Internet shop – is intended for production sale, can be built in a corporate site. He allows to place orders, to register electronic payments, to provide delivery.
3. The information site – is intended for placing of the information on the branch, the companies entering into it, parametres of a condition of the market, branch standards.
4. Broker sites carry out a role of intermediaries between buyers and sellers.
5. Electronic trading platforms (ETP): are intended for direct realisation of trading-purchasing activity. ETP, as a rule, are carried out in the form of separate sites, and on them workplaces for granting to users of variety of services are created.
6. Professional B2B-media products.

Let's estimate scales of systems.

Trading platform В2С (electronic shop) actually represents a network of unilateral communication which creates to the seller much more advantages, than to the buyer.

Knots of interfirm electronic trade В2В are faster a network of a bilateral exchange between sellers and buyers, and create advantages to both parties.

Value of system V2S increases approximately linearly with number of users whereas it grows in interfirm trade В2В as a square of growth of number of users.

Let's present that in the market of interfirm trade operate on five potential sellers and buyers. Each time, wishing to make the transaction, the seller should contact each potential buyer. In this case, each of participants of the market should make on five contacts at desire to sell or buy the goods. Sellers will make 25 contacts for sale of the goods, and buyers – 25 contacts in search of the necessary product.

At use of an on-line trading platform, the quantity of necessary contacts between sellers or buyers decreases to 10. Sellers place five offers on sale, and buyers – five demands for goods acquisition.

It is necessary to note importance of professionalism.

Creation of on-line shop of retail trade as a whole does not demand from founders of detailed knowledge of the goods whom they sell. They simply trade in the goods on which there is a demand. Therefore they easily change the list of the offered goods, enter new categories. Contrary to retail trade, in interfirm on-line trade the knowledge of specificity of the goods and commodity markets is a necessary condition of success. Experience and knowledge of the concrete market are the main barriers which should be overcome at creation of knot of interfirm trade.

Let's consider attraction and deduction of clients.

Shops of on-line retail trade use advertising and other programs for attraction of clients. Corporate clients hardly become participants of an interfirm electronic trading platform only having seen an advertising banner. Adjustment of constant contacts to potential clients Is required. Attraction of buyers and sellers is long and expensive process – it is necessary to create and load the on-line catalogue of the seller, it is necessary to understand in business – process, to establish trade rules, to integrate system of knot with systems of sellers and buyers.

All listed features of systems B2B, create essential advantages to founders of systems of on-line interfirm trade. The high starting barrier, necessity of a profound knowledge of branch and high cost of attraction and deduction of clients promote achievement to more profitableness and security of business in comparison with systems of retail trade.

Let's consider information streams of the design organisations.

Before to consider variants of the organisation of systems B2B, it makes sense to remind, as there is a movement of packages of the design documentation and the information in the organisations performing design works.

It is known that number of information streams considerably more than ways of moving of packages of the prepared design documents. Really, in modern economy processing and information interchange of a steel by more powerful and a business dealing effective remedy, than moving of material carriers. Cost of the companies all is in a greater degree defined not by its material actives (buildings, the equipment), and such non-material actives, as people, patents, technologies, and also strategy of association and use of the main information resources of the design organisation.

The considerable part of these information streams consists from easily enough formalized and, hence, giving in to automation, procedures. And it opens a wide field of possibilities for use of modern technologies of transfer and information processing.

Kernel of such automated structure of an information exchange of the organisation performing design works is the Corporate Information System (CIS) or Enterprise Resource Planning (ERP). Its main task is automation of management by information streams between departments of the design organisation. She allows both to a management of the design organisation, and heads of departments, to receive the full operative information on a condition of performance of design works, a financial condition of the design organisation and manpower resources, and also to supervise and operate corporate resources.

As mutual relations with customers of the organisation performing design works, are one of the major conditions of successful business dealing, recently on the foreground in В2В decisions decisions for automation of mutual relations with clients (CRM – Customer Relationship Management) were put forward. Their possibilities usually include marketing functions (the information on design services of the organisation, their advancement on the market, demand studying), sales (the coordination with the customer of requirements, terms and conditions of preparation of the design documentation), and also, postdesign support.

Other important link in maintenance of communications with an external world for the company performing design works, are the organisation of mutual relations with suppliers (SRM – Supplier Relationship Management). Systems of automation of this direction of technologies В2В usually include functions of search of the supplier, the coordination of specifications and purchase conditions.

As system CRM, and SRM, can include also a subsystem of management of chains of deliveries (SCM – Supply Chain Management), allowing both to the seller, and the buyer to have the information on a shipment condition.

Let's consider electronic trading systems.

The first step on a way of maintenance of electronic interaction of the enterprise with an external world is the corporate site of the company in the Internet. At the beginning it is used as an interactive information channel for creation of a positive image of the company and advancement of its goods and services on the market. In the future it may be included or that the function CRM, SRM and / or SCM, transforming it into a commercial enterprise sales portal or B2B B2C.

Let's consider a corporate commercial site.

Key element of such site is the catalogue of the goods and services with instructions of the prices and delivery conditions, and also the sections connected with it and interactive functions of a site. In a commercial part of a site the catalogue should have possibility of transition to pages in which conditions of deliveries and the form of calculations are specified, possibility of registration of the order and reception of acknowledgement on its acceptance to execution is organised. In this case it is possible to say that the company has organised the Internet – trade in the goods and services.

The table – trade Kinds through the Internet
PromotionOrderingType of sales
The detailed catalogue of the goodsThrough the InternetThe straight line the Internet sale
With the prices in the InternetE-mail, a fax, phoneIndirect the Internet sale
The general informationPersonallyInternet Marketing


It is necessary to notice that the companies which have not reached certain level of automation of internal processes, hardly can use advantages of on-line trade completely.

On the one hand, the important advantage of on-line sales is granting of specialised, dynamical information filling (the information on production, its presence in a warehouse, the price and delivery conditions), important for buyers.

On the other hand, at use of technologies of on-line purchases it is necessary to have constantly the information on requirements of all divisions of the enterprise in industrial, non-productive and account materials.

All it demands access to the information from various divisions of the company, its automatic updating and processing. All it the corporate information system also should provide.

Let's consider electronic trading platforms.

Even more difficult is integration of internal information systems with on-line systems of other participants of the market.

Most full and effectively technologies В2В can be realised in specialised on-line trading platforms (marketplace) which services groups of the enterprises acting either as sellers, or as buyers can use. At the expense of specialisation trading platforms allow to organise high-grade Internet trade with granting to participants of a necessary set of services.

As management distinguish three kinds of trading platforms В2В:
- an independent trading platform (Independent trading marketplace);
- a private trading platform (Private marketplace);
- a branch trading platform (Industry sponsored marketplace).

The branch or private on-line trading platform can be created as the supplier interested in simplification of process of sale and delivery of production (sell-side marketplace), and the buyer, wishing to optimise process of purchase of accessories and materials (buy-side marketplace).

Let's consider types of trading platforms В2В.

Each of models of the organisation of an on-line trading platform has the advantages and lacks.

Independent trading platforms.

Independent trading platforms have involved in due time a huge media exposure and investors. They were usually created young vigorous the Internet – the companies for service of certain industries or commodity groups. They offered participants the decision of problems of search of trading partners, a uniform place for business dealing, virtual management of business mutual relations and possibility to compare the price of various suppliers.

Branch trading platforms.

Branch trading platforms became the answer of traditional business to domination of the newly made Internet companies. These trading platforms have allowed industrial giants to take advantage of advantages of on-line business and to operate developments В2В-commerce in the sector of economy.

Private trading platforms.

Private trading platforms are created by large firms for the purpose of the maximum use of possibilities of on-line technologies for deepening of integration with the trading partners. Private trading platforms unite existing internal information systems of participants for improvement of work of chains of deliveries and reduction of costs on transaction between them.

It is possible to name examples of the Russian systems of this type systems Dealine and RSI Dealers Network.

Let's consider specialisation of trading platforms В2В.

Usually ETP usually specialise on certain branch or production (vertical knots) or on defined business – process (horizontal knots). Attempts to satisfy all and everyone are a direct way to a failure.

Let's consider vertical knots.

Vertical (branch) ETP serve the vertical markets (mechanical engineering, metal rolling, mineral oil). They give the information specific to given branch and consider specificity of the mutual relations which have developed in it.

The success of vertical knots is promoted by following factors:
- increase in a fragmentation among sellers and buyers;
- decrease in efficiency of operating systems of deliveries;
- a profound knowledge of specificity of the market and mutual relations between participants;
- creation of the main catalogues and convenient system of search.
- presence of the accompanying verticals, balancing client base.

Let's consider functional (horizontal) knots.

Functional platforms В2В are focused on performance of certain functions or automation of certain process (logistics, insurance, carrying out of payments) for various branches. Their experience is usually concentrated round defined business – process which is horizontal, i.e. easily transformed on the various vertical markets.

The success of functional knots is promoted by following factors:
- level of standardization of process;
- a profound knowledge of process and experience of its automation;
- addition of automation of process with the deep information maintenance;
- ability of adaptation of process to specific requirements of various branches.

Let's consider trading models of knots of interfirm electronic commerce.

At creation ETP various models of the organisation of interaction between sellers and buyers are used. It can be models with the fixed prices, typical for sales under catalogues, or systems of dynamic pricing, characteristic for auction, exchange or barter trade.

The list or catalogue model concentrates sellers and buyers in one place. It is the best for the branches characterised by a strong fragmentation of sellers and buyers which often carry out transactions with rather inexpensive goods. Thus it is not meaningful to coordinate the prices, and they are fixed by sellers. The catalogue model also well works, if the majority of sales is carried out by known suppliers and by certain rules, and for a choice of the seller it is necessary for buyer to familiarise with offers of a great number of small suppliers. And, at last, this model well works in the markets where demand is predicted enough, and the prices vary seldom.

The Auction model provides spatial data of sellers and buyers. It well works in cases when the non-standard, unique either perishable goods or services are on sale or bought by the companies which have various approaches to definition of cost of the goods. Rare subjects, the capital equipment, the goods which were in the use, the warehouse rests get to this group and to that similar products.

The Exchange model provides the time coordination of a supply and demand. Such model demands creation of mechanisms of the coordination of demand – offers in real time, market price definition, and also process of registration and carrying out of transactions. This model is the best for the standardised production having of a little easily standardised characteristics. The exchange model is attractive to the markets where demand and the prices are astable. She allows participants of the market to operate surpluses or demand peaks.

Frequently, knots of interfirm electronic trade offer not one, and some methods of trade.

Let's consider functionality of trading platforms.

In the world of on-line trading platforms does not exist such which offer all set of the functions necessary for the conclusion and execution of transactions. Though many models of electronic trade offer a wide set of the functions, any of them cannot support all from them equally. In each specific case the best decision is the choice of a set of services (from information filling before management of chains of deliveries) and their functionality, is the fullest of satisfying users. For various types of platforms of the requirement to functionality of each service considerably differ.

The table – Requirements to functionality of trading platforms (types of a trading platform: 1 – independent, 2 – branch, 3 – private)

FeaturesType 1Type 2Type 3
Information for the community*****
Product Development*****
Purchase of non-production materials*******
Purchase of manufacturing materials*******
Product Manufacturing****
Approval of the transaction and payment******
Execution Order and logistics*******
Plan and manage the delivery******
Maintenance and Support*******

* – Low functionality or its absence
** – Average functionality
*** – High functionality

Thus, trading platforms differ the possession form, functionality, an activity orientation, a choice of partners and the advantages given to participants.

The majority of the Russian companies recognises possibilities and the advantages given by on-line trading systems, but they, frequently, underestimate difficulties of their introduction. For the fullest realisation of advantages of electronic business it is necessary for the companies:
- to create base internal information system;
- to reconsider internal processes, systems, standards, approaches;
- to overcome resistance to changes both in the company, and at its partners and clients.

And founders of platforms should understand accurately, they can satisfy what requirements of the potential clients, in comparison with traditional methods of trade they can give what advantages to users, how much users are ready to adapt for new technologies of business dealing.

Each of the considered models of construction of trading platform В2В allows to raise efficiency of one or several major functions in the course of purchase and sale:
- search of the supplier;
- a transparency of the prices;
- tracing of movement of a product on a delivery chain;
- logistics;
- product working out;
- purchase and supply;
- planning of a chain of deliveries;
- management of services.

But any of models of a trading platform cannot give all these advantages simultaneously. Therefore the company wishing most full to use advantages of technologies В2В it is necessary to use strategically and dynamically operated complex approach which most effectively uses possibilities of this or that model for the fullest satisfaction of its requirements.

Skilful use of a combination of various models becomes in the near future the important factor of maintenance of competitive business. In process of development of technologies В2В, the companies considering that electronic commerce – only purchase and sale process, risk to remain on a roadside of road and to be more far-sighted from business more far-sighted and aggressive competitors.

Sources:
1. Kutukov V. B2B: Construction and work principles. – 2003 [http://www.cfin.ru/itm/B2B_basic.shtml]
2. Wikipedia: B2B [http://ru.wikipedia.org/wiki/B2B]

The author: Челябэнергопроект
Date: 03/23/2010

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